Full transcript
0:00welcome to another episode of suby talks
0:02today we're going to be talking about
0:04how to build a profitable online Food
0:06business with me in the studio I have
0:08Ramsey Al Omari thank you for joining us
0:10Ramsey pleasure thank you for having me
0:12shout out upy talks thank you tell me a
0:15bit about yourself Ramsey who is Ramsey
0:17so I've uh lived most of my life here in
0:19the UAE but I started my career in FNB
0:22about eight or nine years ago I was
0:24selling a SAS solution called Uber Eats
0:26you've probably heard of it before it's
0:27yes yeah big food delivery arm of big
0:30name called Uber uh and I was doing that
0:32for about 2 years out in San Francisco
0:34killed it there did a good enough job to
0:36move to the Dubai office did the same
0:38thing then I moved to the cloud kitchen
0:40space was managing sales as well
0:43establishing relationships with
0:44restaurants here in the UA this was Peak
0:45covid by the way so when people were
0:47shutting restaurants down I was out
0:50there on the phones trying to establish
0:52Partnerships to get people in to operate
0:54in our Cloud kitchens across the
0:56UAE um that was on the supply side and I
0:59always wanted to be on the demand side
1:00of the f&b industry closer to the foods
1:02yeah closer to the food absolutely so I
1:05was head hunted to manage the entire
1:07food delivery business for a company in
1:09Qatar they're actually the largest
1:10Hospitality operator 45 Brands 90
1:13Outlets my goal there was to grow the
1:15entire food delivery business so I
1:17joined there did about two and a half
1:19years achieved my goal and today I'm
1:22taking all of my experience and learning
1:23and going out there on my own to build
1:25our Mar marketing agency so that's what
1:27I'm doing today it's an impressive uh
1:29background you have there and I'm seeing
1:31that you're very active on LinkedIn as
1:32well sh a lot of really yeah really
1:34great industry advice which I really
1:36appreciate as well and especially one
1:38real that really stuck with me was the
1:39one that you were I believe in an
1:40Iranian restaurant where you were
1:43basically you were bitching about
1:44restaurants having too big of a menu and
1:46that restaurant had a small menu and
1:48that was like a really good thing but
1:49what was that actually yeah I was in I
1:51was in aad and we were just hanging
1:52around having good lunch as you always
1:54have in a study and I was asked to talk
1:57about menus in general and I had the
1:58menu in my hand and I was I was looking
2:00at it and it just came to my mind over
2:02the last couple of years of course in
2:04this industry I've realized that the
2:05shorter menus win the ones that have a
2:09concise straightforward offering are the
2:13ones that the consumers prefer to order
2:14from especially when it comes to online
2:16gone are the days where restaurant uh
2:19are offering 40 to 50 menu items right I
2:22think the restaurants of the future are
2:23ones that specialize in one Cuisine one
2:26Niche offering sometimes we even see
2:28restaurants that specialize in one it
2:30and they're doing an absolute killing so
2:32you know there are certain factors that
2:33obviously determine why operators should
2:35have a shorter menu and I think as we
2:37move as a you know as a I think
2:40consumers want to make decisions faster
2:42especially when it comes to online and
2:44shorter menus help consumers do that
2:45much A lot easier it's also easier to
2:47manage their food cost obviously we've
2:48seen that with sappy as well that if you
2:50have a shorter menu especially if you
2:52have just a smaller amount of
2:54ingredients to manage it's easier to
2:56bulk purchase your items from suppliers
2:58you also just have less wastage because
3:00you know you have higher turnover of
3:01these single items instead of having a
3:03big menu so I guess from the cost side
3:05it's more efficient but also from the
3:06revenue side it seems that if you have a
3:08smaller menu you're well known for
3:10something and people want to come back
3:12and remember you for this so absolutely
3:13it's a good point to see how this really
3:14impacts both bottom and top line
3:16especially if you're a New Concept we
3:17see a lot of operators that are coming
3:18into the space today or let's say want
3:20to be food operators that come into FNB
3:23and don't really know what options or
3:25what food to serve the end consumer so
3:28it's again it's a lot more simple and
3:31easy to specialize in one thing versus
3:33having different types of Cuisines we
3:34see operators have Japanese American
3:37Chinese Italian all in one menu right it
3:40also gives this impression that you
3:41don't focus on anything you're not good
3:43at anything as a as an end consumer
3:45people think that you don't really do
3:46anything really well right so even from
3:48a kind of consu I'm talking purely from
3:50a consumer point of view we would trust
3:52places more if we know for a fact they
3:54absolutely kill in Asian Cuisine they do
3:56a great job in having you know the best
3:59pizzas or the pasta versus a restaurant
4:01that has every single thing and claims
4:03to do every single thing well it's just
4:05literally not possible okay so Ramsey
4:07I've been seeing a lot of your reals and
4:08it seems that you are bashing a lot on
4:11some operators in the market you like
4:13would you say that the majority of the
4:14FNB operators don't really know what
4:16they're doing I wouldn't say bashing but
4:17yeah it's it's a spicy question for sure
4:19I think for moments like this we need
4:21something to show how spicy that
4:22question is and what is that which is
4:24why I've brought oh my God this
4:26legendary spicy sauce if you've lived in
4:28Dubai you know exactly what the sauce is
4:30it's basically the best sauce in town
4:33and um I would say that there are a lot
4:35of operators out there who don't know
4:36what they're
4:37doing people underestimate the
4:40difficulty of running and operating a
4:41restaurant today there are certain
4:43things that give the impression that
4:45operating and owning a restaurant is
4:46very easy to do in fact it's very
4:48complex and very difficult to do right
4:51and there are a couple of reasons for
4:52that cloud kitchens for example when
4:54they first hit the industry it was an
4:56easier solution versus opening a
4:58restaurant and it still is today it's a
5:00lot cheaper it's a lot faster to scale a
5:01lot faster to open but at the same time
5:03the way that it's explained to the mass
5:06it's put in such a way that you can just
5:09get up and running and everything will
5:10be fine and on day one you're going to
5:12be having 100 200 orders when in reality
5:14it's not the case do your research right
5:17AB absolutely you have to do your
5:18research for sure before you do anything
5:20you have to do your research especially
5:21in a market like Dubai and the UAE where
5:24food is massive right it's by the way
5:27Dubai is the second most popular ated
5:30City in terms of restaurants in terms of
5:32restaurant density Dubai is the second
5:34most ranked in the world so there's a
5:36lot of Concepts here in the in Dubai and
5:38in the U competition of course and of
5:40course with with competition as well
5:42right if anything that means that you
5:43should focus more on doing research and
5:46understanding how you need to stand out
5:48otherwise you will absolutely get killed
5:49in this market if you don't know what
5:51you're doing and you're coming in for
5:52the first time so yeah to go back to
5:53your question there are a lot of
5:54operators who don't know what they're
5:56doing and there's also a lot of people
5:57who are underestimating how difficult it
5:59is to operate an owner restaurant we've
6:01seen the same thing when it comes to
6:03understanding the costs that are
6:05associated to any recipe that you're
6:07selling we've seen a lot of operators
6:08they just jump into just putting
6:10something on their menu but they're not
6:12really understanding what should be the
6:14normal food cost should it be 30% should
6:16be 40% should be 20% of your Revenue
6:18that you're making for a menu item and
6:20this is actually a really important
6:22industry Benchmark that we would like to
6:23offer to clients which is understanding
6:26where should your food cost be for a
6:28particular item a lot of operators just
6:30don't know this and they just jump into
6:32oh I'll set it at this kind of price it
6:33looks fair but actually it should be
6:35based on a food cost but also should be
6:37based on what competitors are pricing as
6:39you have mentioned too I think there's a
6:40sort of standard across the industry
6:42right people automatically assume food
6:44cost is about 30% of of of cost is that
6:47the case is that what you're seeing as
6:48the case in general or can it be lower
6:50can it be higher so typically it would
6:52be rather about 25% in this market okay
6:55though it can obviously vary on the type
6:57of Cuisine and also on the menu category
6:59like typically side dishes have a lower
7:01food cost you make more margins there
7:04but on main courses especially on like
7:05specialty main courses like steak you'll
7:07have higher food cost but then the idea
7:09is that you want to maximize your profit
7:12by tying these many items that have a
7:14higher food cost with those that have a
7:17lower food cost so that eventually what
7:19you're selling on a table you're making
7:21a decent margin that's in the topic of
7:23menu engineering as we love to say it
7:25like what's your take on how to build a
7:27menu yeah I think as I said before the
7:30the first thing someone should focus on
7:32when they're looking at building a menu
7:34is having some sort of specialty
7:36focusing on one Cuisine instead of
7:38taking on all these all these different
7:39Cuisines but it is an interesting thing
7:41to take into consideration where you
7:42have these items that maybe you would
7:44price a little bit higher to make
7:46certain items look a little bit cheaper
7:47so you can draw more customers in that's
7:49an interesting way to play with menu
7:50it's menu psychology right menu
7:52engineering at the end of the day so I
7:53think as I said
7:55before there's a lot of things that need
7:57to be taken into consideration espe when
7:59it comes to designing and creating a
8:02menu not only from a cost perspective
8:03but also from a menu psychology
8:06perspective and what you want to offer
8:07to the end consumer but I would love to
8:10ask you as well since this is you know
8:12what you guys are solving for at sappy
8:14which is amazing really hats off to what
8:16you guys are doing in terms of menu
8:17engineering what would you say is like
8:19the a ABCs of menu engineering well menu
8:22engineering is really all about just
8:24categorizing everything that you sell on
8:26your menu from your stars to your main
8:28courses to your desserts to your
8:29beverages into four categories where you
8:33are going to categorize them either by
8:35calling them a star which means that
8:36they're very profitable and they
8:38contribute a lot to your revenue on the
8:40opposite side you have your dogs which
8:41are those that don't contribute in a lot
8:43of revenue and profit and then you have
8:47the puzzles which are essentially those
8:49menu items that have a very good unit
8:51profit but they don't sell a lot and on
8:53the opposite side you've got your plow
8:55horses which sell a lot they bring in a
8:57lot of Revenue but not a lot of profit
8:59but each time that you sell them it's
9:01all about really understanding how each
9:03of them are having has their role
9:04because obviously not all of your menu
9:06items can be starred because it's always
9:08relative you know each menu item
9:09performs relative to another and
9:11typically you also want to only look at
9:13your menu items within the same category
9:15so you want to compare your starters
9:17with your starters your men your main
9:18courses with main courses and really
9:21understand how you can employ certain
9:23small tactics to make them drive your
9:27top line and bottom line even better
9:29very common example is where the example
9:32of the steak that I gave before a steak
9:34is typically a plow horse it's going to
9:36bring a lot of Revenue but it doesn't
9:38bring a lot of profit because it's a
9:39very expensive ingredients and typically
9:41people are not willing to pay an
9:43extremely high price for it but no one's
9:45going to eat a steak on its own you're
9:47never going to go just eat the steak
9:48you're always going to tie it with a
9:50beverage or with a side dish just fries
9:53which are typically then your puzzles
9:55which are the ones that they don't sell
9:57that much but they bring in a lot of
9:59unit profit so that's how you can
10:00construct a mix on your menu and let
10:03these menu items work together so that
10:06by the end you can have a pretty decent
10:07bottom line of course you're going to
10:09have certain menu items which we would
10:10call dogs which they don't sell a lot
10:13despite efforts they you know you trying
10:15to promote them but they're not selling
10:16a lot they don't bring in a lot of
10:18profits you'll typically think of
10:20removing these from your menu but
10:22there's only one reason you would really
10:24keep them and that is for your point
10:26about menu psychology sometimes you'll
10:28just have items on your menu just to
10:30look other items look cheaper it's not
10:32really the most beautiful tactic but it
10:34is what works and people will consider
10:36for example that a steak is reasonably
10:38priced because oh the lobster is so much
10:40more expensive so let me just go for the
10:42steak so that's one reason you would
10:43keep it if it makes sense that it
10:46doesn't cause too much wastage for your
10:48restaurant because every single menu
10:50item that you're offering supposedly you
10:52need to assume some client is going to
10:53order it at some point and that means
10:55you have to keep it in your stock and if
10:57it's an item that has that is very
10:59isable which is fresh produce it
11:01requires proteins of course keeping it
11:03in stock and no one's ordering it means
11:04you're going to have to waste it at some
11:05point which is also adding to your food
11:07cost so it's really about just
11:09understanding your numbers and really
11:10making a trade-off is it worth keeping
11:12on the menu considering all the wastage
11:13that's happening and scrapping of your
11:17menu is just a decision that sometimes
11:18you need to make that's a great point
11:20and these are things actually I'm also
11:22learning for the first time as well you
11:23know it's not something that I would
11:25have a real specialty in it would be
11:27interesting to understand your
11:28perspective on would you apply a
11:31strategy in which you're increasing the
11:33price of one item within the same
11:35category versus the other item to make
11:38that category sell more or would you say
11:40it only applies cross categories you
11:42could it really depends of course again
11:44here you also need to look at what your
11:46competitors are offering if you're a
11:48steakhouse and you're
11:50considering you know there's a certain
11:52item which is relatively commoditized
11:53let's say a wagu of a certain grade that
11:56you're selling at a certain price if
11:58you're competing in the price category
12:00like let's say you're not a fine dining
12:01operator you're more let's say casual
12:03dining you need to understand if your
12:05price is going to now cause that you're
12:07going to look expensive in the eyes of
12:08other competitors then of course that's
12:10consideration you need to take into
12:11account on the other side if you can
12:14position it as a more unique dish that
12:17some other operators are not going to
12:18have then of course you have more wiggle
12:20room when it comes to increasing the
12:22price or at the same time you could also
12:25for example introduce other side dishes
12:27that are let's say even more profitable
12:29so you can tie it with that same menu
12:31item without touching the initial price
12:33there's always a lot of tactics you can
12:34employ just to get the overall bill that
12:38you have on on the table to get that to
12:41certain food cost that is acceptable for
12:43you as an operator I think it's
12:44fascinating try to explain this to
12:46someone who's never been in this
12:47industry right going back to what we
12:49were saying earlier people rush to get
12:51into this industry because of the ease
12:53let's say or let's um how can I say the
12:56the false perception that getting into
12:58it is is very easy right so this is
13:00something that not everyone really
13:01understands and would would even look at
13:03or even consider it looks so fun on the
13:04outside right oh running a restaurant
13:06it's must be easy it looks like it looks
13:08like the best thing and the the funnest
13:10thing in the world but actually you have
13:11to be crazy to love FNB you have to
13:14really be crazy to love it when you're
13:16making your money is when normal people
13:18are relaxing right like the peak hours
13:19that you're making your money is
13:21evenings weekends it's not an industry
13:24for lazy people absolutely not no it's
13:26not it's not something that you can get
13:27into thinking you're going to sit on the
13:29beach while your team manages everything
13:31at the restaurant right I I know
13:33operators who have been in this space
13:34for 25 years and still when you go to
13:36their restaurant on weekends uh weekday
13:40they're sitting there talking to their
13:42team day in and day out right so again
13:45going back to the fact that this is an
13:47industry truly for people that want to
13:49build a brand and establish a certain
13:51type of reputation in the market that
13:52takes time for some reason everyone
13:55believes you can open a restaurant one
13:57day and tomorrow you're going viral
13:59right there are a lot of anomalies in
14:01this IND become a big chain or become a
14:03big chain right that's what everyone
14:04loves to believe I'm going to open a
14:05coffee shop I'm going to be the next
14:06Starbucks great yeah absolutely right I
14:09mean I would rather even if I mean there
14:11are certain examples in this industry
14:12where you look at take fixed chocolate
14:14for example right massive success but
14:17people forget that she's been in the
14:18space for five years before that four
14:20years before that grinding hustling
14:22before the the content went viral and
14:24things really took off right again I was
14:27talking to someone recently actually
14:28it's a mutual a friend of ours and we
14:30were having this conversation and she
14:31she was telling me something quite
14:32interesting she said everyone wants to
14:34eat the omelet but no one wants to crack
14:35the egg love it yeah so ultimately what
14:38that means is everyone wants the success
14:40of having this viral brand and this this
14:42place where everyone is going to and
14:44people are having your products and
14:45people are there in out tables are
14:46turning like crazy but no one wants the
14:48struggle of actually taking the 3 four
14:50five years to build an establishment
14:52that brings those people in spending the
14:54money on marketing right those days
14:56where there are no orders those days
14:58where things are is frustrating and and
15:00truly you feel like you don't want to be
15:01in it it's very much a mindset game as
15:03well and I think that doesn't just apply
15:05to FNB that applies to everything in
15:07life not to get too philosophical here
15:08but it applies truly specifically to our
15:11industry right you have to have the
15:13mindset of longevity otherwise you're
15:16really you're just going to get crushed
15:18100% And it's so important to keep that
15:19consistency as well like I think you've
15:22touched upon it in one of your reals
15:23that it's not just about designing the
15:26perfect recipe and then you're opening
15:28your restaurant great amazing food and
15:30people are coming to it it's about
15:32really maintaining that consistency and
15:33being able to deliver that quality over
15:35and over and over again that is really
15:37difficult so quality and consistency
15:38yeah quality and consistency is the name
15:40of the game right people come to you and
15:42try you for the first time they expect
15:44something especially when they have a
15:45great experience they expect to have
15:47that every single time right so if you
15:50look at the best operators and ask them
15:52how did you get to where you are today
15:54I'm offering a quality product and I'm
15:56doing it every single time and it trans
15:59is just product now we're going into
16:01experience as well so dining is becoming
16:03more experiential within certain
16:05categories but genuinely I believe from
16:07what I've seen in my experience there
16:08are certain touch points that you have
16:11vers in a D in Space versus you have in
16:13a delivery format right so you have a
16:15lot more touch points when you're at a
16:16brick and motor location versus when
16:18you're just selling to people online
16:21right so regardless quality and
16:23consistency needs to be there in
16:25whatever format you're serving it is a
16:27name of FNB it's a name of the game
16:29that's why franchises are super
16:30successful right because no matter where
16:32you go you know your your meal is going
16:34to taste the same in one country versus
16:36the other country yeah so speaking of
16:39franchises It's actually an interesting
16:41one business model to look at like when
16:43you take a franchise you're essentially
16:45you're not owning the brand so you're
16:47taking less risk because you're working
16:49with an established brand but at the
16:51same time you also you don't have as
16:53much control because you don't get to
16:54also take decisions on like what
16:56technology you get to use sometimes you
16:57know it gets constrained imposed by the
17:00oper by the franchiser would you say
17:02that taking a franchise makes sense like
17:04would you do it I feel like this is a
17:06spicy question we need to take it out
17:08get the hot sauce out for this one does
17:10it make sense I think it depends if
17:13you're getting into the industry for the
17:14first time it could make sense because
17:16everything is sort of set for you you
17:18have your Sops you have your standards
17:19you have your processes your systems and
17:21you just have to execute uh properly
17:24right accordingly but if you're kind of
17:26looking at it from a I want this as a a
17:29side hustle or as an investment point of
17:31view yeah it could look like something
17:33that may not be a good idea right so
17:36again it depends on the person it
17:37depends on their appetite for me
17:39franchises again solve that problem of
17:41brand they've been in the space whether
17:43it's local or Global and theyve
17:45validated the concept right so that is
17:47also a positive in terms of franchises
17:50and everything has kind of this give and
17:52take uh but for me I'm I'm more of a I'm
17:55more you know marketing kind of point
17:56I'm looking at it from a marketing point
17:58of view yeah you've taken all those
17:59years to inv you know someone else has
18:01invested all those marketing dollars
18:02into establishing a brand name and
18:04you're kind of coming in and just
18:05growing it from there it makes sense
18:07yeah yeah look from a technology point
18:09of view I do also resonate with taking a
18:12franchise is actually a good good thing
18:14to do because typically a franchisor
18:17will be the will be the organization
18:19that will determine what technology is
18:20used which it really sounds as a
18:22constraint like oh I have to use this
18:23point of sale I have to use this
18:24inventory system I have to use this
18:26accounting software but the reason why I
18:28do think makes sense because it gives
18:30this level of support that the
18:32franchisor can offer to its franchises
18:34because ultimately a franchisor wants
18:36its franchisees to be successful because
18:38they take royalties on the revenue and
18:40the profits that they are making so when
18:43a franchise operation has consistency
18:45across its systems it can also make it
18:48easier for the franchisor to Benchmark
18:50and to understand who's performing well
18:51who's underperforming and can give
18:53certain strategic advice as in to say
18:55hey your food cost in this specific
18:57Branch it's not really up to the same
18:59standards as the other ones maybe
19:01there's some issues in your supply chain
19:03maybe there are some problems with your
19:04Sops so these kind of issues can be
19:06flagged if a franchiser has access to
19:09that uniform data that they can look at
19:11so I guess from your point of view and
19:13also from the point of view of of
19:15Technology it's really really
19:16interesting to see that taking a
19:18franchise is actually very good safe bet
19:20it you know it's very supported system
19:22that you're you're signing up for and
19:24eventually can teach you all those
19:25skills to then later on build your own
19:27brand because ultimately if you're
19:28really pass about food you probably
19:29really want to try something of your own
19:32but I guess it's a good stepping stone
19:33for getting into the industry yeah I
19:35couldn't agree more and you mentioned uh
19:37cost you're talking about food costs
19:38right I've met a lot of franchise or who
19:40have vertical integration so what
19:42they're able to do is manage the entire
19:44distribution and production of their
19:46items which they can then sell to the
19:49franchisee for Cost Plus which helps the
19:52franchise manage food costs right and
19:53that's a benefit you have in the market
19:55if your food cost is sub 25% like you
19:57said is somewhat of the a average then
19:59you can come in and offer real value to
20:01Consumers with quality and take over the
20:04space and really build a good loyal
20:05customer base there are great franchise
20:08you know franchise Brands here that have
20:10been widely wildly successful I think in
20:12the GCC as well we're seeing a lot of
20:14homegrown Concepts people love to
20:16support local Concepts right so I think
20:18now that we' talked about franchise
20:20having a local concept as well is
20:22something that could be quite
20:23interesting except the fact that you
20:25need to invest heavily in building a
20:27brand name which takes time to do right
20:30like we talked about 100% And um I have
20:34another spicy question for you I should
20:35bring out the hot sauce then you should
20:36bring out the hot SAU let's he the
20:38question
20:39first um it's really about building an
20:42online Food business now there's a lot
20:45it's I'm getting I know this is going to
20:47get spicy I'll keep bring keep it ready
20:49keep it ready we'll do so there's been a
20:51lot of talk about aggregators and
20:53aggregators they take such large
20:54commissions and they don't allow us to
20:56be profitable what's your take on
20:58aggregor like are they really the devil
21:00that FB operators say or is there a way
21:03to build a profitable business while
21:04still working with aggregators there is
21:06a way to build a profitable business
21:07while still working with aggregators for
21:09sure and anyone who tells me aggregators
21:11charge too much I say that they have
21:14this again a bit spicy kind of point of
21:17view but they can charge that because
21:19they have the reason to do so right look
21:20at the number of transactions that are
21:22happening on these delivery platforms on
21:23a daily basis it's a live market
21:26hundreds of thousands of people are
21:27ordering with the attention to order not
21:30just to scroll sure you have a couple
21:32percentage points people that are just
21:33scrolling shopping around but if you
21:36look at it if you look at the intention
21:38behind ordering food on delivery
21:40platforms versus someone who's seeing
21:42food on social media like Instagram and
21:44tikt the intention on delivery platforms
21:46is a lot higher so their pricing is
21:49somewhat
21:50Justified I also tell people who
21:52complain about high aggregated
21:53commissions that they shouldn't Focus
21:55too much on what they cannot control in
21:58fact you bring those commissions down if
22:00you play ball with the aggregators
22:02ultimately what they're looking for is a
22:04restaurant that delivers volume they
22:06want restaurants that are credible they
22:08want restaurants that people are
22:09ordering from and they also want
22:11restaurants that can be consistent in
22:12terms of meeting operational
22:15kpis in the early days of aggregators
22:17people could buy positions at the top of
22:20these pages and win customers but I
22:23think over time that model has changed
22:25because delivery platforms has has have
22:27realized that buying your way to the top
22:29is not a sustainable model they don't
22:31want people that can just buy their way
22:33to the top of the aggregator and those
22:34pages but keep their driver waiting for
22:3730 minutes and the and then the order is
22:39late to the end consumer and the
22:41customer leaves a bad review and now
22:42that
22:44so yes aggregators are charging high but
22:46I think it's somewhat Justified people
22:49who are in this space using that as an
22:51excuse as to why they're not performing
22:53I don't think is the right mindset to
22:55have the things that you can control you
22:57should focus on building a loyal
22:58customer base building good reviews
23:01generating orders the aggregator is the
23:03place today to get people to order food
23:06from you it it simply is and it's not
23:08going to go away as long as your food
23:09cost is in check that's what our point
23:11of view would be is that yes you can
23:13look at these aggregator cost the
23:14commissions are very high but if your
23:16food cost is above 35% 40% of course
23:20you're never going to make profit no way
23:21no way that's something you can control
23:23you can control your food cost today and
23:25then you can still make a good profit
23:27because there are still a lot of success
23:28for restaurants on these aggregators oh
23:30100% there are many there are many for
23:32sure and food cost is part of the
23:34equation if anything I would argue your
23:36food cost is probably one of the most
23:37important things outside of marketing on
23:39delivery Platforms in terms of turning a
23:41profit on delivery platforms because
23:43don't forget you have to account for
23:44their commission and you also have to
23:46account for the fact that if you're a
23:48new operator you need to give reasons to
23:50people to try you for the first time no
23:52one has ever heard of you before you
23:53don't have reviews you don't have
23:55credibility in the market how can
23:57someone who's looking at you for the
23:58first time order from you organically
24:01not saying it's impossible don't get me
24:02wrong it can happen but you need to
24:04incentivize them and usually in this
24:06market because it's a very value-driven
24:07Market the end consumer is expecting a
24:09discount so when you look at discount
24:12you look at aggreg aggregated
24:13commissions and then you're looking at
24:14Food costs you're left with very little
24:17and we haven't even talked about your
24:18other traditional costs yet right so
24:21yeah there is a way to deploy strategies
24:23to ensure your orders are profitable but
24:26you need to do it in a proper way and
24:28again you need to do it over a certain
24:29period of time nothing happens over 9
24:32truly that's very interesting I want to
24:35pick your brain on something else it's
24:36not it's not spicy you don't have to
24:38take out the sauce but I'll take this
24:40off for now we we cannot be having a
24:42podcast about online food ordering Etc
24:45without talking about the biggest Trend
24:48the buzzword that is of course
24:49dominating all Industries sure AI what's
24:53your take on AI and food Ai and food I
24:57I'm seeing a lot of involvement I think
24:59a lot of operators or even Solutions
25:01today are are using this as a buzzword
25:03to grab attention and of course it works
25:06because globally it's a subject that is
25:08very talked about this region
25:10specifically I believe there are a lot
25:11of people that still don't understand Ai
25:14and the power of AI and I don't
25:18see Solutions today
25:21helping other people understand how they
25:24can use AI to better drive efficiencies
25:27better reduce CA there's a couple of
25:29players of course sappy being one of
25:31them for sure but AI in terms of FNB I
25:34think we're only seeing the start of it
25:36and it'll continue to grow more and more
25:38there are a lot of solutions solution
25:40offerings in in FNB for sure and there
25:42are a lot of ones that really don't need
25:44to be there right so I think it's a
25:47buzzword for now there are people that
25:50are operating and using AI as a tool to
25:52help operators succeed in this industry
25:55but it's not being done in such a way
25:57that it's truly revolutionizing FNB I
25:59think the last Revolution we saw was in
26:02the cloud kitchen space right they
26:03really came and shook up the entire
26:05industry AI is yet to do that we will
26:08see it it's yet to happen though I agree
26:11with your point of view the thing is
26:12that FNB in hosp Hospitality in general
26:15is still an industry that always will be
26:18very driven by human touch okay if we're
26:20talking about online ordering perhaps
26:22less because there is a way of
26:23automating more of that when you go to a
26:26restaurant you will still want to served
26:28by a person especially when we talk
26:30about fine dining casual dining that
26:32human touch will still always be quite
26:33important never change and I think also
26:36one very very important limitation for
26:38AI is that if the inputs to whatever
26:41system that is based on AI aren't
26:44accurate the output is just going to
26:46maybe look fancy but it will not be
26:48really insightful or useful like we've
26:50seen this a lot with chat gbt like you
26:51know you ask it a certain question and
26:53it just really goes delirium you know it
26:56gives you spits you out some answer that
26:57really is based on on nothing it invents
26:59information in some cases and then you
27:01have to call it out and it actually
27:02admits you actually oh yes this was
27:04based on nothing and like I am also yet
27:06to see in in our industry in FNB where
27:10AI is hopefully focusing a little more
27:12on fixing the inputs rather than
27:14sprinkling it on top of some data and
27:17then making it look like a fancy output
27:19and we've seen this as well where people
27:20say oh we have an aid driven dashboard
27:22we're going to do forecasting Etc and
27:24it's going to tell you how much you
27:25should order from your suppliers based
27:27on historic data but okay in theory this
27:29really works well but AI is also going
27:32to have its limitations when it comes to
27:34inputs that are that correct and it's
27:36not going to yet have that ability to
27:39figure out whether something is really
27:40just Incorrect and it's going to give
27:42you recommendation where if people then
27:44become lazy and just are going to rely
27:46on okay whatever the AI says we're going
27:47to just take it it might really lead to
27:51wrong results as well and another
27:53limitation of AI I find is that AI will
27:55never be able to understand the the new
27:58es of Human Relationships and if you are
28:00an FNB operator you're dealing with a
28:02lot of Human Relationships you have your
28:03staff you have your suppliers you're
28:05dealing with the government you're
28:06dealing with customers let's say that
28:08you're dealing with a supplier and okay
28:10your supplier gives you a certain credit
28:12term you need to pay within 30 days and
28:14if you don't pay then we're no longer
28:15going to supply to you let's say that's
28:17the formal business rule but there is an
28:19element of relationship where oh you're
28:21a little bit late but you know you're my
28:23friend it's fine I'll keep supplying to
28:24you etc etc because I trust you because
28:27I know you know you're connected to my
28:29my nephew what whatnot so AI is not
28:32going to pick that up he's just going to
28:33be very cold and rational about okay
28:35this is the business rule we apply it we
28:37don't apply it and we give
28:38recommendations based purely on that but
28:40it's not going to take into account that
28:41Nuance of I trust you you're my friend I
28:45don't trust you you're not my friend Etc
28:47so as long as AI cannot solve that piece
28:50I think any industry and f&b being one
28:52of them will still have a certain
28:55limitations when it comes to relying on
28:57AI to make any decisions because there's
28:59always going to be that element of
29:00taking a business decision where you
29:03need a human to understand the nuances
29:05of the relationships that it impacts and
29:07then to act accordingly absolutely I
29:10couldn't agree more very well said and
29:11it's not something that a lot of people
29:13take into consideration people expect AI
29:15to just be this thing that spits out
29:17results and just have output it's in
29:19fact the input that AI must take into
29:22consideration to give out an effective
29:24output right you look at the way that
29:26GPT is being used today right it's only
29:28as effective as the prompts that you
29:30give it in fact there are courses and
29:32languages that you must learn when it
29:34comes to speaking with AI otherwise
29:36maximizing and utilizing it to the best
29:38possible outcome is is really not there
29:40it's a great point I think a lot of
29:42people also misunderstand AI as well I
29:43don't personally understand all of it to
29:45be honest it's a world that is Way
29:47Beyond me personally but I think it'll
29:49be interesting to see how it evolves
29:50over time and also how it can balance
29:53out with like you said that human factor
29:55of hospitality because I genuinely
29:57believe believe as well that there are a
29:59lot of SAS or let's say solutions that
30:02are taking away from the human touch we
30:05need solutions that work in in you know
30:08in um how can I say in they work with
30:11humans right it needs that input right
30:14yours being one of them you need
30:16accurate input of information right so
30:18it must work with humans in that way and
30:20not take away from the hospitality or
30:22the experience or you know a guest you
30:25can never replace a waiter or waitress
30:28giving the smile at the front of the
30:29door of the restaurant greeting guests
30:31in right that's a feeling that you can't
30:33replace even with robotics impossible to
30:35do right so I think AI is if anything it
30:37should support us in a way of making the
30:40industry a bit better and we have to
30:42find ways to get people to work with it
30:44instead of it just being this problem
30:46solver solution and fixing everything
30:49when in reality I don't believe it to be
30:51the case at least for now maybe things
30:53could change I don't know yeah indeed
30:56we're yet to see some big applications
30:58it in FNB but we'll keep our eyes out
31:01now but what's your take on software as
31:04a let's say that you're an FNB operator
31:06you've been on that side of things
31:08what's your take when it comes to
31:10assessing what technology you use how
31:12would you pick your vendors I think
31:14that's a good question
31:16um look like we talked about right
31:18managing food costs is one of the
31:20biggest things that you must be able to
31:22do and learn and and know how to do as
31:24an operator so a solution that helps me
31:26do that manage myself suppliers manage
31:28my food cost understand as well from a
31:30data perspective what will help me
31:33ultimately increase sales and decrease
31:35cost as well so for me it I would be
31:37looking and choosing solutions that
31:39would give me the most amount of data
31:41right because even if we talk let's take
31:43a step back even if we talk about data a
31:46lot of people still don't have the right
31:47solutions that give them the data a lot
31:50of people don't have the right people to
31:52understand and examine the data and
31:54analyze the data and then a lot of
31:56people don't know how to even extract
31:58you know uh logical potential solutions
32:00from the data so there are various
32:02stages and steps that you need to take
32:04with the information that you get from
32:06Solutions whether it be you know Suppy
32:09solution or other solutions to have the
32:11right people in place to understand and
32:13draw certain conclusions and execute
32:17based on those conclusions today that's
32:19somewhat lacking right I've actually
32:21seen sappy in action and it is one
32:25solution that I think is imperative and
32:27critical for every operator to have it's
32:29absolutely critical well look our
32:31mindset is very clear around it and it
32:33agrees mostly with what you say is that
32:35a software is always going to have these
32:37limitations of it's never going to
32:38replace that element of a human
32:41critically thinking about what insights
32:43you know what are the actions you need
32:44to take to as you said increase Revenue
32:46decrease costs and that's why we really
32:48believe that the time is over for these
32:50generic softwares that just do on paper
32:54what you think is needed because there's
32:56always going to be the element of
32:57interpretation
32:58and that's where industry expertise is
33:00always going to be essential and that's
33:01why we really believe in being a
33:03specialist software that caters for a
33:06specific industry which in this case is
33:07FNB and also handles only a scope that
33:12we know that we can build sufficient
33:13expertise in you cannot be an all-in-one
33:16software and at the same time understand
33:18everything that's going on and because
33:20like we said earlier like it's so such a
33:21complex industry everything that's
33:23happening on how do you manage yourself
33:24how do you manage your inventory how do
33:25you manage procurement from suppliers
33:27how do you manage your sales your online
33:28marketing your reservation system
33:30there's just so much to handle and it
33:32just got more and more complex as
33:34Internet grew and consumer Behavior
33:36changes so we believe in being a
33:38specialist software so that the people
33:41that work at our company can truly give
33:43industry advice along with that software
33:45so it's not just like hey you can do
33:47your processes you can just functionally
33:49do what an inventory should do it's it's
33:51about giving you advice into how should
33:54you truly run your inventory how should
33:56you build your recipes how should you be
33:58procuring from your from your suppliers
33:59how do you run your stock count so that
34:01it's done as per certain industry
34:04standards that really allow you to get
34:06those insights that you can truly
34:08improve your top line and your bottom
34:10line because otherwise you're just
34:11buying a software for the sake of it
34:13which some people would be tempted to
34:15say okay it's an all-in-one software
34:16great it does everything I need to but
34:18the people behind it will never really
34:20understand the problems that you
34:21specifically are interfacing so that's
34:24really our take on it on how software
34:26should be I I couldn't agree more right
34:28I think there's as like they say there's
34:30riches and niches right you're solving a
34:32specific problem and that's a problem
34:34that a lot of people have today the most
34:36successful FNB businesses are not
34:38successful because of their marketing in
34:41fact it's they're successful because of
34:42their operations like what we talked
34:44about earlier right going back to
34:45Quality and consistency supply chain and
34:47procurement is a massive element to that
34:50right giving the right quality at the
34:52right price every single time for a long
34:55period of time is how you succeed in FNB
34:57on top of of course giving that
34:59experience right and staying engaged and
35:01staying aware so hats off to what you
35:03guys are doing no seriously it's I would
35:06100% recommend Suppy as a solution to
35:08any operator whether they're existing in
35:10the market or looking to get into the
35:11market for the first time well thank you
35:13very much and I still have a few
35:15questions for you sure we're not done
35:17one may still be a little spicy time to
35:19bring it out I'll bring it out then it's
35:22um related to again one of your reals I
35:24love this sauce by the way it's
35:25literally there's nothing better than
35:26this sauce honestly parip no no I don't
35:28they're not plugging this no no paid
35:30sponsorships I think maybe this is the
35:32last time we bring the
35:34SAU last spicy question it's about Cloud
35:36kitchens because there's a lot of Buzz
35:38around should you open a cloud Kitchen
35:41yes or no you should open a cloud
35:43kitchen only if you're looking to test a
35:45certain concept mhm you should not be in
35:47the cloud Kitchen business if you're
35:48looking to build a brand name right but
35:52if you're looking to test the concept
35:54and validate a certain idea Cloud
35:56kitchens are the best solution right and
35:58for reasons that we talked about earlier
36:00it's cheaper it's faster to scale faster
36:02to set up so the the model of cloud
36:05kitchens actually has changed since they
36:07first opened right when we first saw
36:09Cloud kitchens in the industry it was
36:11Peak covid and the models that we were
36:13working on was getting people to
36:15basically expand in our Cloud kitchens
36:18and we would manage their entire
36:19operation we've seen that change today
36:21what we're seeing is a lot of people uh
36:23renting spaces out right that's the kind
36:25of model that seems to be working today
36:27day and as I said there's this
36:29misunderstanding because of the ease of
36:31cloud kitchens how difficult the
36:33industry is so again it depends on the
36:35mindset honestly I think the answer to
36:37that question would be it depends on the
36:38mindset that you have going into FNB to
36:40begin with is it a passion project do
36:42you see yourself really genuinely being
36:44an FNB and if so is the cloud kitchen
36:46the right way or right thing to do
36:47although it could be cheaper as I said
36:49before you have different touch points
36:51so if you're in a popup you have you
36:53know your branding your signage your
36:55lights you have the team to kind of
36:57greet the yes but if you're in a cloud
36:58kitchen and you're running a virtual
36:59brand the only things that you're
37:01touching the customer with is the photos
37:02that you have online which by the way
37:04are critical to success on delivery
37:07platforms how big your menu is like we
37:09talked about earlier your packaging
37:11right packaging also plays a big part
37:13and your branding as well so we're
37:15talking about four or five things really
37:17everything else is out of your control
37:19how fast the driver gets the door of the
37:21customer that's kind of not in your
37:22control you have control over prep time
37:25but everything else is not really within
37:27your reement right whereas if you're
37:29looking to build a brand and you want
37:30more touch points which give a customer
37:33more of an experience with your concept
37:35then maybe a virtual brand in Cloud
37:36kitchen is not the way to go so it
37:38depends on what you're looking to do
37:40it's a great idea to get into a virtual
37:43get into a cloud kitchen to test a
37:45certain concept and validate a certain
37:47idea or a Cuisine or Concept in a
37:49certain area you do that for 3 to 6
37:51month 8 months a year and then you
37:54decide whether or not you want to open a
37:55brick and mortar or continuous cloud and
37:57in your contines to validate certain
37:58Concepts regardless of whether or not
38:00you want to open a virtual brand or
38:01Cloud kitchen you need to be in the
38:03mindset of longevity it's not a a game
38:06that can be won with fun coupons you
38:08need to be strapped you need to have
38:10cash you need to be able to manage your
38:11Opex and you also need to be making sure
38:13you're spending on marketing because
38:14again less touch points means you have
38:16to spend more on The Branding and
38:17marketing side to get people to convert
38:19with you I hope that answers the
38:21question I think somewhere there there
38:23was like a maybe a yes A no but again it
38:26depends really it was a great answer
38:28indeed and thanks for that and maybe
38:30some last takeaways on like what are
38:33some other tactics to build to increase
38:36the profitability of your brand that
38:39you're building let's say you're in FNB
38:40whether you're online whether you're
38:41brick or mortar what are some other
38:43tactics to look at to really improve
38:45that bottom line you know just
38:47profitability in general yeah absolutely
38:48a good question don't rely on discounts
38:51it's a very value-driven Market here in
38:53the UAE people are looking for discounts
38:56there genuinely is a lot lot of people
38:57that only will order from you if you
38:59have discounts the second you remove
39:01that discount they're not ordering from
39:03you there's two things there they're not
39:05your customer number one number two
39:07you're playing with discounts a little
39:09bit too much it's not a bad thing to
39:11experiment with discounts but to revolve
39:13your brand truly just around discounts
39:16is a very dangerous thing to do you can
39:18burn your brand very quick and very
39:20easily there so that's tip number one
39:22discounts are not a bad thing play with
39:24them and experiment with them in
39:26moderation and look at the data to
39:28understand whether or not it's actually
39:29driving sales and there's different ways
39:32to experiment with discounts right so
39:33that's number one there different
39:35discount types too number two as I as I
39:38said before value right so when you look
39:40at the ideal menu today it has something
39:42for the single it has something for the
39:44couple it has value meals it has combos
39:46it has a few starters a couple of mains
39:48and of course one or two desserts here
39:49and there there's no need to over
39:51complicate things right social media
39:54also plays a very crucial and important
39:56part in getting your brand out there you
39:58cannot rely fully on aggregator
40:00platforms especially because of the
40:01microeconomics of your discount
40:03commission and food cost and after that
40:05you have very little to play with so
40:07running a proper social media strategy
40:08is equally as important as focusing your
40:10efforts on Performance Marketing on
40:12delivery platforms as well right so I
40:14did a video recently and may be online
40:17already I was talking about you know
40:19what is the biggest opportunity in terms
40:21of content creation for restaurant
40:22operators today and for me I think the
40:24biggest opportunity is taking the camera
40:26back of house
40:28and showing the authentic documentary
40:31style view of how a restaurant is
40:33running amazing instead of the end
40:36result of this cheesy Burger which looks
40:38nice by the way and by the way I've gone
40:39to restaurants because of how insane the
40:41food looks sometimes I've been
40:43disappointed other times I was extremely
40:45impressed but social media is also an
40:48amazing tool although the mindset is not
40:51to get you know people are not in the
40:52mindset of ordering right then and there
40:54when they see your content on social
40:55media but it's more of an awareness tool
40:58right you want to stay top of mind the
41:01UA has 18,000 restaurants today
41:04competing with that many people is not
41:07easy to do so the more content the more
41:09things you put out there to get people
41:11to see you top of Mind ultimately the
41:13more conversions you're going to have
41:15and they may not convert on the first
41:16time but the second time they see you
41:18they'll check your menu the third time
41:20they see you they'll refer you to a
41:22friend right check this place out or
41:24I've tried this place it was really good
41:26right and then they become a loyal
41:27customer over time so again I always
41:29revert back to this it's a Time game I
41:32had someone get upset at me the other
41:34day saying that I was telling them to be
41:35patient too much interesting it's the
41:38first time I've ever had this happen to
41:39me by the way yeah right how did you
41:41handle it I handled it you know with
41:43grace Of course with Grace and respect
41:46but I stand by my guns FNB is a
41:49long-term game if you want to be in this
41:51industry you need to play for the long
41:53term and make sure that you're offering
41:55a quality product every single time to
41:57every single guest in a very consistent
42:00consistent Manner and you'll build a
42:01loyal customer base over time it's as
42:03simple as that without burning the bank
42:05as well without burning a bank but you
42:06also need to be strapped right you have
42:08to have you make sure you have the
42:10funding to be able to survive two or
42:12three years if things are not happening
42:14the way that you want to happen right
42:16100% And there's an interesting trend is
42:18Al also we've been observing is that
42:20everyone's bashing around aggregators
42:22are so expensive Etc as my previous
42:24point so this is the alternative of
42:26going into direct ordering channels
42:28where people build their own food apps
42:30for example and allow people to directly
42:33order from these brands that they really
42:35want to order from so what's your take
42:37on these I think the option should be
42:39there for sure we've seen it happen in
42:41the past right so when you have a loyal
42:42customer base ultimately wherever you
42:44ask your customer to go they will go for
42:46you right because they want your product
42:48really really well I I do this even to
42:50this day my favorite brands in fact it's
42:52only one brand but some of my top
42:54choices that I love to order in and day
42:57out if they have an app I'll order from
42:59that app directly right so it's
43:02definitely something that the C the
43:04restaurant should give to the customer
43:05in terms of an option but again they
43:07shouldn't rely fully on
43:09d2c um because it doesn't give as much
43:12brand awareness probably uh not
43:14necessarily but I think going back to
43:15aggregated commissions people look at
43:18aggreg aggregated commissions being so
43:20high but at the same time if you look at
43:21the cost of acquisition of a customer
43:24via social media or direct to Consumer
43:26arguably it could be higher right so if
43:28you're paying 30 35% commission to get
43:30the customer who has the high intent to
43:32order via aggregators you'll probably
43:34spend a lot more on brand
43:35awareness targeted campaigns boosting
43:38your Instagram profile the costs behind
43:41creating organic content it could
43:44actually come out to it being more
43:45expensive than 30 35% Commission on each
43:47order right but d2c is extremely
43:50important I think every operator should
43:51have a DTC Channel anyway right because
43:54you also get the ability to collect
43:55customer information and customer data
43:58you get to own the data which on
44:00aggregators today is not possible you
44:02don't even know who's order from you the
44:04name is just there but then again the
44:06name is not enough it's not aggregated
44:08you don't have like insights like you
44:09know the age and the gender and
44:11absolutely demographics psych all these
44:13different things you don't have access
44:15to any of that data right so D Toc is a
44:16good option to have um a channel in
44:19which you can basically collect consumer
44:22insights with those consumer insights
44:24you can run campaigns more effectively
44:25you can do marketing more effectively
44:27you can be more efficient with your
44:28spend ultimately your C customer
44:30acquisition cost goes down and you have
44:32more profit so DTC is ideal but again
44:36with everything it takes time to do that
44:38right yeah but it's a great question for
44:40sure no that's really interesting um
44:43look um thanks Ramsey for being with us
44:46in the studio I think this was a very
44:48discussion I appreciate it thank you for
44:50having me hopefully we can go and enjoy
44:51the spicy sauce now can go get our
44:53favorite burgers in town uh thanks for
44:56coming over pleasure thanks so much for
44:57the conversation